Who is Naresh Goyal, Jet Airways founder arrested by ED
The Enforcement Directorate (ED) arrested former Jet Airways Chairman Naresh Goyal on Friday in connection with an alleged Rs. 538 crore Canara Bank fraud case. The 74-year-old was reportedly taken into custody under the Prevention of Money Laundering Act (PMLA) after a lengthy interrogation at the ED's Mumbai office. So, how did the once-16th richest person in India meet such a downfall? From Jet Airways' historic takeoff in 1991 to its recent financial crash landing, here's a look.
Founded Jetair in 1974 for sales, marketing services
After receiving his Commerce degree in 1967, he began working in the travel sector for Lebanese International Airlines, per Jet Airways archives. From 1967 to 1974, he reportedly worked for many international airlines and gained extensive expertise in all elements of the travel industry. He formed the aviation sales and marketing company Jetair (Private) Limited in May 1974, after gaining knowledge and technological know-how, with the goal of providing services to international airlines in India.
Goyal was IATA board member for almost 10 years
In 1991, Goyal set up Jet Airways as a fresh addition to his commercial activities. The airline was founded to provide scheduled domestic aviation services in India. On May 5, 1993, Jet Airways commenced commercial operations. Given his vast aviation history, Goyal was selected to the International Air Transport Association (IATA) Board of Governors for two terms, from 2004 to 2006 and again from 2008 to 2016.
Recipient of several awards, honors
Goyal is the recipient of several national and international awards, which include the "Entrepreneur of the Year Award for Services" from Ernst & Young in September 2000. He and his wife, Anita Goyal, were named "International Entrepreneurs of the Year" by the readers of Asian Voice, the largest circulation newspaper in the Asian community in the United Kingdom. He was also awarded the prestigious "Lifetime Achievement Award of the Year" by the Travel Agents Association of India (TAAI) in 2010.
Jet Airways founder's troubled history
The non-resident Indian (NRI) businessman Goyal brought Jet Airways to the top. However, he stepped down from the board along with his wife in March 2019 amid a financial crisis at the company. Later, the Central Bureau of Investigation (CBI) registered an FIR against him after Canara Bank alleged sanctioning credit limits and loans to Jet Airways (India) Ltd. (JIL) totaling Rs. 848.86 crore, with Rs. 538.62 crore outstanding. The account was declared "fraud" in July 2021.
Canara Bank uncovers siphoned funds
According to reports, Canara Bank alleged that the airline's forensic audit revealed that it paid "related companies" Rs. 1,410.41 crore out of total commission expenses, siphoning off funds from JIL. Personal expenses of the Goyal family, including staff salaries, phone bills, and vehicle expenses, were also paid by JIL. Funds were also allegedly siphoned off through Jet Lite (India) Ltd. (JLL) by way of making advances and investing, and then writing them off by making provisions.
Jet Airways' downfall
Eventually, in April 2019, Jet Airways ceased operations after running out of cash. The airline struggled with financial difficulties and grounded its entire fleet due to non-payment of dues to lessors and suppliers. Lenders led by the State Bank of India (SBI) attempted to find a buyer but failed, resulting in the airline's bankruptcy and asset sale. The downfall of Jet Airways highlights the consequences of mismanagement and financial irregularities in the airline industry.
Know about money laundering case
Last November, Canara Bank lodged a complaint of cheating, criminal conspiracy, criminal breach of trust, and criminal misconduct, among others, against Goyal and his wife. Subsequently, in May, a fraud case was registered against them by the CBI. The ED later filed a money laundering case. To recall, Jet Airways shut operations in April 2019 when its debts amounted to Rs. 8,000 crore.
